DAILY NEWS
January 29, 2020
IN THIS ISSUE:
1. PRIME MINISTER: THE STATE CONSISTENTLY SUPPORTS ADDITIONAL INVESTMENTS IN THE COUNTRY AND ALSO CREATION OF STRONG GEORGIAN BUSINESS
2. CREDITING OF NATIONAL ECONOMY INCREASED LAST YEAR BY 30%
3. MORTGAGE LOANS, ISSUED TO LEGAL ENTITIES IN LARI, INCREASED LAST YEAR BY 29.2%, ISSUED IN FOREIGN CURRENCY – BY 30%
4. MORTGAGE LOANS, ISSUED TO PRIVATE INDIVIDUALS IN LARI, INCREASED LAST YEAR BY 54%, ISSUED IN FOREIGN CURRENCY – DECREASED BY 0.8%
5. NBG LEFT MONETARY POLICY RATE INTACT
6. DIRECT AIR COMMUNICATION WITH CHINA IS TEMPORARILY SUSPENDED
7. ECONOMY MINISTER: IN 2019, GAS INSTALLATION WAS CARRIED OUT QUICKER THAN PLANNED
8. TBILISI CITY HALL: SINCE MARCH, SYSTEM OF ZONAL-AND-HOURLY PARKING WILL BE ENACTED ON BARATASHVILI STREET
9. TBILISI MAYOR: IN A YEAR, USE OF CHARGERS FOR ELECTRIC VEHICLES WILL BECOME PAID
10. BANKRUPTCY PROCEEDINGS LAUNCHED AGAINST GEORGIAN LOTTERY COMPANY
1. PRIME MINISTER: THE STATE CONSISTENTLY SUPPORTS ADDITIONAL INVESTMENTS IN THE COUNTRY AND ALSO CREATION OF STRONG GEORGIAN BUSINESS
While speaking at donors’ conference in Tbilisi today, Georgia’s Prime Minister Giorgi Gakharia declared that “The state consistently supports additional investments in the country” and specified: “Domestic, as well as foreign investments”.
The Premier indicated also that “The state supports creation of strong Georgian business, that business, which has to become the main driving force of economic growth and most important, has to become the main driving force of creation of additional jobs”.
At that, Gakharia declared that “Obligation of the state is creation of infrastructure network” and pointed that “The state in recent years quite effectively invested billions of lari”.
At the same time, “It is complicated for our economy to convert legal framework of these concrete achievements into real results for ordinary Georgian citizens and for representatives of medium and small business at least”, the Premier admitted.
In this connection, Gakharia indicated deep and comprehensive free trade regime, which Georgia has with the EU. “We have to admit that in recent years, unfortunately, we had no serious breakthroughs here, especially from the point of view of business, private initiatives, economy and medium business”, he said, though noted that “There are such problems, absolutely objective, as standardization level, compliance, competence level, quality of control”.
The Premier complained that “It is difficult to operate for the country, which has a full legal framework of relations with the EU, but has no land frontier with the EU”. “At this stage, we need the biggest help from our European friends. It is strengthening of road communication, at least by means of the Black Sea in the direction of the EU”, the Premier declared.
2. CREDITING OF NATIONAL ECONOMY INCREASED LAST YEAR BY 30%
National Bank of Georgia reported that credits, issued by Georgian banks to various spheres of national economy (in national and foreign currency), totaled as of January 1 to 15.25 billion lari. The volume has increased by 8% quarter-on-quarter and by 30% year-on-year.
As of the reporting date, biggest share in total crediting (26.6%) had industry – 4.05 billion lari (growth – 6% quarter-on-quarter, 37% year-on-year).
The second most credited sphere was trade – 20.2% of total volume (i.e. 3.09 billion lari, growth – 3% quarter-on-quarter, 16% year-on-year).
Construction was the third – 12.2% (1.87 billion lari, growth – 13% and 53%, respectively).
Next were operations with real estate, researches and commercial activity – 1.75 billion lari (growth – 14% quarter-on-quarter, 64% year-on-year); hotels and restaurants – 1.43 billion lari (growth – 10% and 31%, respectively); financial mediation – 694.2 million lari (growth – 14% and 20%); healthcare and social services – 625.65 million (growth – 10% and 26%); agriculture – 482.17 million (growth – 12% and 19%); transport and communications – 459.25 million lari (growth – 13% and 19%); education – 201.49 million (growth – 17% and 52%).
3. MORTGAGE LOANS, ISSUED TO LEGAL ENTITIES IN LARI, INCREASED LAST YEAR BY 29.2%, ISSUED IN FOREIGN CURRENCY – BY 30%
National Bank of Georgia reported that mortgage credits, issued to legal entities by Georgian banks in national currency, totaled as of December 31, 2019 to 1.95 billion lari. The volume has increased by 1% quarter-on-quarter and by 29.2% year-on-year.
In turn, mortgage credits, issued to legal entities in foreign currency, totaled as of the reporting date to equivalent of 6.56 billion lari, reducing by 9.2% quarter-on-quarter, but increasing by 30% year-on-year.
As of end of December 2019, average interest rate on mortgage loans, issued in national currency, made up 12.2%, against of 11.5% in September 2019 and 13.2% in December 2018.
Similarly, average interest rate on mortgage loans, issued in foreign currency, made up 7.1%, against of respective 7.6% and 8.3%.
4. MORTGAGE LOANS, ISSUED TO PRIVATE INDIVIDUALS IN LARI, INCREASED LAST YEAR BY 54%, ISSUED IN FOREIGN CURRENCY – DECREASED BY 0.8%
National Bank of Georgia reported that mortgage credits, issued to private individuals (including sole entrepreneurs) by Georgian banks in national currency, totaled as of December 31, 2019 to 4.45 billion lari. The volume has decreased by 6.7% quarter-on-quarter, but increased by 54% year-on-year.
In turn, mortgage credits, issued to private individuals in foreign currency, totaled as of the reporting date to equivalent of 5.77 billion lari, reducing by 2% quarter-on-quarter and by 0.8% year-on-year.
As of end of December 2019, average interest rate on mortgage loans, issued in national currency, made up 11.9%, against of 11.5% in September 2019 and 13.9% in December 2018.
Similarly, average interest rate on mortgage loans, issued in foreign currency, made up 6.5%, against of respective 7% and 7.3%.
5. NBG LEFT MONETARY POLICY RATE INTACT
National Bank of Georgia (NBG) reported that its Monetary Policy Committee decided today to keep the refunding rate without change. Respectively, the monetary policy rate still makes up 9%.
As NBG noted, considerable impact on inflation at the beginning of 2019 had provided by nominal effective exchange rate, in response to which toughening of policy was started in September of last year.
According to current forecast, with other things being equal, inflation will begin to decrease in the beginning of this year and will approach the target indicator by the end of the year, NBG said, noting that the monetary policy will remain rigid until medium-term inflation expectations do not decrease to the target of 3%.
NBG also indicated that in recent period, acceleration of economic growth and high growth of crediting were observed. In case, dynamics of these indicators creates additional inflationary pressure, it can act as prerequisite of maintenance of tough monetary policy for a longer period, NBG declared.
Next meeting of Monetary Policy Committee will take place on March 18.
6. DIRECT AIR COMMUNICATION WITH CHINA IS TEMPORARILY SUSPENDED
Georgian Civil Aviation Agency reported about temporal suspension of direct air communication with China as part of actions, aiming prevention of spread of coronavirus in Georgia.
The decision is already notified to aviation authorities of China and affected airline (i.e. China Southern Airlines), the Agency noted.
As the Agency said, imposed restriction will act until end of winter navigation season (i.e. March 29), but admitted its revision “taking into account risks, connected with epidemiological situation in China”.
7. ECONOMY MINISTER: IN 2019, GAS INSTALLATION WAS CARRIED OUT QUICKER THAN PLANNED
“In 2019, gas installation was carried out quicker than planned and more people got an opportunity to join gas network, than it was supposed earlier”, Georgia’s Minister of Economy and Sustainable Development Natia Turnava declared.
In particular, the Minister reported that in 2019, Georgian Gas Transportation Company conducted gas installation works in 41 settlements, located in 20 municipalities of 7 regions of the country. “In total, 702,485 running meters of gas pipeline were constructed and 10,820 consumers got an opportunity to connect to common network of natural gas”, she noted.
According to the Ministry, construction works, required for gas installation, are underway at this stage in 20 settlements of various regions, which should be completed in the first half of this year. At that, gas installation projects are prepared for additional 145 settlements, while predesign studies completed in 407 settlements.
The mentioned data were reported today at presentation of report for 2019 and plans for 2020 of Gas Transportation Company (operates main gas pipelines, totaling to about 2,000 km).
While presenting the report, head of Gas Transportation Company Mikhail Shalamberidze declared that 3-year program of gas installation (2019-2021, 229 million lari) should apply to 295 settlements. Upon completion of this state program, “gas will be installed in about 90% of Georgia”, he noted.
8. TBILISI CITY HALL: SINCE MARCH, SYSTEM OF ZONAL-AND-HOURLY PARKING WILL BE ENACTED ON BARATASHVILI STREET
Tbilisi City Hall declared that since March 10, system of zonal-and-hourly parking will be enacted also on Baratashvili Street.
Parking for disabled persons and owners of electric vehicles will be free on this street too, the City Hall noted.
To remind, system of zonal-and-hourly parking, envisaging parking fee calculation depending on particular zones of the city and duration of parking, was introduced in 2019 through 2 pilot projects – on Kote Abkhazi Street and on the streets, adjacent to Orbeliani Square.
9. TBILISI MAYOR: IN A YEAR, USE OF CHARGERS FOR ELECTRIC VEHICLES WILL BECOME PAID
At this stage, installation of free devices for electric vehicles’ charging continues in Tbilisi, the Mayor Kakha Kaladze pointed at the capital government meeting today.
At that, Kaladze indicated that “In a year, use of chargers will become paid”. “The price will be established, after we will announce a tender and will have a winner company”, he noted.
The Mayor specified that currently, chargers are installed in the capital’s districts Gldani, Saburtalo, Nadzaladevi, Didube, Vake, Samgori, Chugureti and Isani. In total, 28 battery chargers are already installed, while installation of 12 devices will be finished in next few days, he pointed, noting that in scales of Tbilisi, 60 chargers have to be installed in two stages.
10. BANKRUPTCY PROCEEDINGS LAUNCHED AGAINST GEORGIAN LOTTERY COMPANY
On January 21, Tbilisi city court decided to launch bankruptcy proceedings against LLC Georgian Lottery Company.
According to the court, the bankruptcy request was submitted on January 20 by director general of the company Levan Chikvaidze.
National Bureau of Execution was appointed a custodian of the company, while meeting of creditors will be gathered on February 25.
According to the Public Register, LLC Georgian Lottery Company was registered in 2009 in Tbilisi. Owner of 70% is Georgian state, while 30% belong to Lexor Capital Corp (British Virgin Islands).